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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: patron_anejo_por_favor who wrote (8728)	2/6/2003 9:38:03 AM
From: Mr. Sunshine	Respond to of 306849

<<Let's see...they've poured their savings into making the down payment, so presumably they have little cushion (even without other major debt)...so what happens to our heroes when one of the couple gets, you know, "laid off" 3 months after they close (ie, just after charging for the last furniture purchase)? >> Then they our heroes are SOL. Lenders used to require savings of at least 3, sometimes 6 months mortgage payment before they would do a loan. Underwriting standards have loosened up so much now they like to see it, but usually do not require it. Loose underwriting is typical for a bubble, and often leads to a crash when all the marginal buyers that they made loans to lose their jobs and have to sell the house in a hurry. FWIW, I strongly warn my clients not to stretch their budgets too much in case of layoffs or other problems, but most real estate professionals could not care less as long as they close the deal and get a commission.